Climate change causes $3.8 billion loss to Pakistani economy every year
Pakistan 8th most vulnerable country to climate change
Pakistani economy
bears $3.8 billion annual loss caused by climate change. In terms of economic
costs at $3.8 billion, we are number three over a 20-year period. What this
means is that our economy is constantly at risk from climate catastrophes and
this is not just an environmental challenge but an issue impacting our economy,
human health, agriculture and ecosystem.
According to
Global Climate Risk Index 2021, Pakistan is among the countries that are
"recurrently affected by catastrophes [and] continuously rank among the
most affected countries both in the long-term index and in the index for the
respective year".
Pakistan has
shown some progress on the climate change front since the PTI came into power. Pakistan
was ranked 5th most vulnerable country to climate change on the
Global Climate Risk Index in 2020. But in 2021 index it stands at 8th
spot. There is still a long way to go to control the damage caused by climate
change. Lot more needs to be done.
The data
also indicates that the government, as well as the world, is not taking enough
measures to cope with the challenges and risks that climate change poses to
Pakistan, experts say.
The report
clearly indicates that the world hasn’t acted, so the vulnerability of the
whole world is increasing, and since Pakistan hasn’t acted, things are
worsening for us too.
Former
interim finance minister and governor State Bank of Pakistan and current
chairman of Pakistan Stock Exchange Karachi has stressed the need to act on
climate change in her speech at “The
Future Summit – What’s Coming Next”, she said that global uncertainties had
increased following every episode of crisis since the 2008 economic and
financial crisis.
Pakistan’s
greenhouse gas emissions grew 50% with CO2 reaching 200 million tons in 2019. Energy
and transport are the biggest emitters followed by the industry, agriculture
and land practices. Air pollution is costing Rs50 billion, not to mention the
health issues.
Textile, Pakistan’s largest industry and exporter, is globally known to have contributed 6-8% of the emissions and 70% of it is attributed to the upstream energy-intensive material processing.
“In the wake
of these threats and vulnerabilities, the cost of climate in action is going to
be larger than the cost of climate action,” she said. “The share of public
expenditure made to combat climate change is barely 6-7%.”
Only a
segment of the corporate sector subscribes to sustainable reporting and a few
of them are committed to zero emissions by 2030 and that happened during the
COP26. However, no regulatory agency of Pakistan requires borrowers to follow
climate disclosure.
So, future
can be safeguarded by assigning priority to sustainability and recognising that
meeting the needs of present without compromising the needs of future
generation has high payoffs for nations. This also requires political and
corporate leaders to have an eye on long term growth and probability to
safeguard the planet and people. A host of measures, if adopted, could be game
changer for Pakistan.
Fundamental
amendments to policy, legal and regulatory frameworks should be introduced. “I
hope we get them in order before the climate havoc falls on us,” she said. “We
have to offer incentives to the industry to invest in safeguarding environment,
ecology and biodiversity.”
Investment
to GDP ratio has been very volatile in Pakistan. It has declined from 17.3% in
fiscal year 2018 to 15.2% of GDP in 2021. “The low investment to saving is
really the underlying cause of our historic unsteady and unsustainable growth
path.”
“Of course
Pakistan needs to double its investment to GDP ratio to 30% to enhance
investment in sustainable climate resilient and inclusive infrastructure to
protect our nature and ecology.”
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